Tuesday, May 01, 2007

It seems that Clarks shoes have finally felt the sting of the harmful and economically backward decision by arch numpty Peter Mandelson:

Profits at C&J Clark, the family-controlled shoe company, fell last year after the EU imposed tariffs on shoes imported from China and Vietnam.

CandJ Clark's profits fell last year as a result of EU imposed tariffs on shoes imported from China and Vietnam.

Turnover at the company, which owns Clarks, Britain's largest shoe retailer, rose from £920.6m to £972.7m in the year to January 31 2007, but pre-tax profits slipped from £71.9m to £69.4m, according to accounts filed at Companies House.

In his statement to shareholders Peter Davies, chairman, said that the "politically inspired decision to impose anti-dumping duties on footwear imports from China and Vietnam" had cost the group £4.8m and warned that it was likely to cost a further £13m this year.

As I have written before, the decision by the EU to impose tariffs on shoes coming from China and Vietnam was nothing but a politically motivated decision designed to appease the countries in Europe who have not, and do not plan to, adapt to globalisation.

What was particularly stupid about this decision was that the European Commission team went to Brazil to decide whether or not China and Vietnam were engaged in anti competitive practises. The GDP per capita in China is $8600The GDP per capita in Vietnam is $7600The GDP per capita in Brazil is $3100

So they aren't exactly identical now, are they. What's more, with the sheer numbers of people, particularly in China, their wages are much lower. Now, whilst not paying workers very much might cause a huge tizz amongst the bleeding heart socialists, in order for countries to develop and get rich, they take advantage of the resources they have in abundance. If poor countries develop then yes, the rich get rich first, and then there's a trickle down effect. If you have a look at the Kuznets curve we see that inequality rises initially when there is a switch away from primary products markets to the secondary sector.

There was no real reason for these protectionist barriers to free trade to be imposed on Chinese and Vietnamese exports, apart from countries such as Italy, Spain and Portugal not being able to compete with them, because they like the over regulated, union driven markets which the EU holds in such high regard. And as a consequence, British firms and consumers have suffered.